Build to Rent (BTR) homes could increase five-fold, with the sector worth £170 billion, according to recent research.
A study by the British Property Federation (BPF) and Savills projects the number of BTR homes completed could reach 380,000 by 2032.
The projection, undertaken in partnership with Get Living, one of the UK pioneers of BTR, and M&G, a leading global investor and asset manager, shows that by 2032 eight per cent of UK homes for rent will be purpose-built, up from 1.5 per cent today.
The analysis predicts a continued evolution in the market, with single-family homes making up almost a fifth (18 per cent) of BTR stock in 10 years’ time compared to 12 per cent today.
The new analysis has been undertaken to coincide with the 10-year anniversary of the Montague Review, a report commissioned in 2012 to remove the barriers to long-term institutional investment into purpose-designed homes for rent.
The review’s recommendations, which were adopted by government, included more support for BTR in national planning policy and Local Plans, the release of more land for development and standardisation of tenants’ rights.
The Montague Review is widely acknowledged to have marked the birth of the modern BTR sector.
Ian Fletcher, director of policy, British Property Federation, says: “The Montague Review was a significant moment that gave birth to the BTR sector as we know it today.
“Ten years on we can say the review achieved its core aim of unlocking long-term institutional investment into homes for rent, helping address the chronic shortage of quality housing in an and around town and city centres and serving as a catalyst for urban regeneration.
“The current market conditions underline that we must continue to diversify housing supply in order to drive economic growth, and the government must continue to look at how planning reform, more support for local authorities and the release of land for development can enable the sector to continue its upward trajectory.”